About this summary

Ndax Canada Inc. (“Ndax”, “we” and “our) believes that our users should understand the crypto assets that they are able to trade using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is GRT. We created this summary to help you understand the basics of GRT as well as some of the risks involved in trading in GRT. While we tried to describe the key features of GRT, this summary isn’t meant to tell you everything you’d want to know before investing in GRT. You should also do your own research on GRT to make sure you are comfortable investing in it.

Description of GRT

History of GRT

The Graph is the brainchild of engineers Yaniv Tal, Jannis Pohlmann, and Brandon Ramirez. When the trio first started developing dApps on the Ethereum blockchain, they encountered a problem. Although Ethereum has a lot of data that is openly accessible, it is hardly available in a format that developers can directly use in applications. So, the founders came up with an indexing protocol that can store and organize data in a way that is easy for developers to access and use. After 3 years of intense beta testing, the mainnet of The Graph finally went live in December 2020 along with the native token GRT.  

What GRT is used for

The Graph indexing protocol can be used by developers of dApps for querying (requesting) data on blockchain networks like Ethereum and IPFS.

GRT is an ERC-20 token that is used to incentivize all the players of this network to build APIs and process queries. Developers can also use the token to pay query fees to the network.  

How GRT works

The Graph Network acts as a middle ground between blockchains and dApps. When building dApps, the network effectively communicates data from the blockchain network to the dApp, making it possible to build complex applications without any lag. Data on this network is organized into subgraphs. Everybody is free to build and publish their own subgraphs.

1. The network consists of four main players who are vital to the protocol:
2. Consumers: Consumers are developers who need data to build their dApp. They pay a query fee and raise a query for data.
3. Indexers: Indexers are responsible for setting up nodes and processing these queries made by developers.
4. Curators: Curators are responsible for evaluating subgraphs and staking their tokens to signal a good quality subgraph. The subgraph with the most number of signals is picked by indexers.
5. Delegators: Delegators are people who do not set up a full node. Instead, they stake their GRT tokens to support indexers for rewards.

Indexers, curators, and delegators earn a part of the query fee paid by the developers as GRT tokens. In addition to this, they also receive indexing rewards.

Certain Staking Services Terms Applicable to GRT

You can cancel your opt-in to the staking services for any crypto-asset within the first four hours of your initial opt-in.

In addition to the other staking terms that you agree to when you opt-in to our staking services, please consult the table below for additional terms that currently apply to the staking service for particular crypto assets at this time. Note that the annual percentage yield (“APY”) is an estimate, and terms are subject to change. All terms in effect are maintained on our website. 

Example: If you have 100 coins staked at 3% APY, the gross reward will be 3 coins for the year. Ndax will earn a fee of 20%, in this case 0.6 coins, and 2.4 coins will be credited to your account based on the payout frequency.

For purposes of the above table:

• “Instant Redemption” may be available for flexible plans on a first-come, first serve basis, subject to availability. If elected, your opt-out is effective immediately, and you are not entitled to any rewards generated within the reward period. This is subject to NDAX liquidity management provisions to fulfill client instructions to sell or transfer crypto assets prior to the Unbonding Period.
• “Standard Redemption” means that your opt-out is delayed for the period of time indicated in the above table, but you collect any rewards generated up to and including those generated within the reward period.
• “Ndax Admin Fee” refers to the percentage fee on the total amount of the reward generated through staking.
• “Bonding Period” refers to the amount of time it takes before you begin to generate staking rewards for that crypto asset from the time you have started staking.
• “Unbounding Period” refers to the amount of time you need to hold your eligible staked crypto assets after opting-in to the staking service before you are able to opt-out.

Risks

Before entering into an agreement (a “Crypto Contract”) with Ndax to buy or sell any crypto assets through the Platform, it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Like other crypto assets, there are some general risks associated with investing in GRT. Each of these risks is described in more detail in the Risk Statement provided to you at the time that you open your account with us and is also available online on the Ndax website and app. You should review the Risk Statement.

In addition to the general risks set out in the Risk Statement, we also point out other specific risks to GRT below.

The strength of GRT is heavily dependent on the strength and performance of The Graph. If The Graph were to experience a serious issue, GRT’s price could be adversely impacted. Also, as The Graph runs on the Ethereum blockchain, if Ethereum were to crash or experience serious issues, GRT’s price could also be adversely impacted.

While we tried to describe the key risks associated with GRT here and in our Risk Statement, we emphasize that this Crypto Asset Statement is not exhaustive of all of the risks associated with trading in GRT. You should also do your own research on GRT to make sure you are comfortable investing in such a crypto asset.

Risks specific to staking GRT  

Prior to staking your crypto assets, you acknowledge that:  

• given the volatility of crypto assets, the value of your staked GRT when you sell or withdraw it, and the value of any rewards you earn through staking, may be significantly less than their current value;    
• there is no guarantee that you will receive any rewards on staked GRT;    
• past rewards are not indicative of expected future rewards;  
• the rewards you are entitled to may be changed at the discretion of Ndax;  
• you may lose all or a portion of your staked GRT if the validator does not perform as required by the network;
• additional risks can be found in the Risk Statement.  

Regulatory Information  

Ndax is offering Crypto Contracts in accordance with the terms of a pre-registration undertaking dated March 23, 2023, that we entered into with the Canadian securities regulators, while our application for registration in certain Canadian jurisdictions is reviewed. Please note that Ndax is not currently registered under securities or derivatives legislation of Canada and there is no guarantee that registration will be granted.

The statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement.

Prior to offering a Crypto Contract on GRT, Ndax assesses whether GRT is a security and/or a derivative under the securities and derivatives laws of Canada. Ndax’s assessment includes a review of the history of the GRT (such as how it was created and its governance structure), its characteristics, its market capitalization, and any regulatory concerns regarding GRT. Based on its assessment, Ndax concluded that GRT is not a security or a derivative. However, there is a risk that this conclusion could change in the future. In that case, Ndax may be required to halt or withdraw GRT from trading on the Platform and stop any future trading of Crypto Contracts based on GRT, and users holding GRT may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in GRT will be notified via the Platform or other electronic means and advised of the options available to them and any applicable period to sell or withdraw their positions in GRT.

No Canadian securities regulatory authority has expressed an opinion about GRT, including an opinion that GRT is not itself a security and/or derivative.